CBDT issues instructions on Supreme Court decision on Section 148 notices

Supreme Court has ruled in favor of Revenue in the re-assessment controversy. The Apex Court held that all notices issued under Section 148 will be deemed to have been issued under Section 148A of the Income Tax Act.

The Central Board of Direct Taxes (CBDT) has issued instructions on the implementation of the Supreme Court Judgement on Section 148 notices in the matter of Union of India v. Ashish Agarwal.

Based on the above, the extended reassessment notices are to be dealt with as under:

(i) A Y 2013-14, A Y 2014-15, and AY 2015-16: Fresh notice under section 148 of the Act can be issued in these cases, with the approval of the specified authority, only if the case falls under clause (b) of sub-section (1) of section 149 as amended by the Finance Act, 2021.

(ii) A Y 16-17, AY 17-18: Fresh notice under section 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub-section (1) of new section 149 of the Act, since they are within the period of three years from the end of the relevant assessment year.

It has been noticed that notices cannot be issued in a case for AY 2013-14, AY 2014-15, and AY 2015-16. if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Hence, in order to reduce the compliance burden of assessees, it is clarified that information and material may not be provided in a case for A Y 2013-14. A Y 2014-15 and A Y 2015-16, if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Separate instruction shall be issued regarding the procedure for disposing of these cases.

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